Reinforcing polymeric composites using nano-sized particles with high aspect ratio have been investigated since the 1980's (see, U.S. Pat. No. 4,739,007). Polymer/layered-silicate nanocomposites have extensively been investigated due to the significant improvements in the mechanical strength and stiffness, enhanced gas permeability barrier, good thermal resistance, and flame retardancy. Polymer nanocomposites normally require a low loading concentration of inexpensive silicate clays such as montmorillonite (MMT), vermiculite, saponite, and hectorite. Well-exfoliated nanocomposites can be produced by in situ polymerization and melt-compounding techniques. Nanocomposites have been prepared by a melting process from a wide variety of polymers. U.S. Pat. No. 4,739,007 disclosed a method to produce nylon 6 organoclay nanocomposites using in-situ polymerization to produce highly reinforced nylon composites, achieving high flexural modulus, tensile strength and heat distortion. On the other hand, these nylon-based nanocomposites become non-ductile. Typically, impact modifiers are added, to improve impact toughness at the expense of flexural modulus. What is desired commercially is an approach for toughening these nylon/organoclay composites to obtain high impact strength while retaining high modulus and strength. Besides, to make high-performance nanocomposite fibers and coating for elastic strings, the improvement in elongation is also important for clay nanocomposites. Some groups have reported improving elongation of clay-based nylon nanocomposites by using a rubber impact modifier while maintaining a relatively high modulus and strength, but none of them achieved a good elongation at break which is comparable to that of pristine nylon (see, A. J. Oshinsko, H. Keskkula, and D. R. Paul, Polymer, 37, 4891, (1996); Young-Cheol Ahn, D. R. Paul, Polymer, 47, 2830 (2006)). Most, reports showed that relatively high rubber loadings over 5% were used to toughen nanocomposites with a high impact strength, leading to even lower modulus and strength than neat polymer, however.